A FOIA request goes after years of confidential contractor information

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A Freedom of Information Act (FOIA) request by a reporter seeks four years worth of federal contractor reports. Now companies would have filed the reports and they concern their equal opportunity hiring records with the Office of Federal Contract Compliance Programs at the Labor Department. The information could be confidential. And contractors have just a few weeks to file an objection with OFCCP. The Federal Drive with Tom Temin spoke with PilieroMazza attorney Kevin Barnett.

Interview transcript:

Tom Temin: Let’s talk about first of all, what reports go to OFCCP. What, specifically, is this report asking for? And it’s not a Federal News Network reporter by the way, this is a different news organization.

Kevin Barnett: So federal contractors with more than 50 employees and contracts worth more than $50,000, as well as first-year subcontractors that meet those benchmarks have to file what are referred to as EEO-1 reports, and there are multiple types of them. But the ones at issue here are the type two consolidated reports. And they reveal the demographic information for the entire workforce. So the form will have about a dozen different job categories. And you need to list how many male employees fall within different demographic categories, and how many female employees fall within different demographic categories for your organization.

Tom Temin: And when you say demographic categories, does that refer to just male or female? Or does it refer to different racial?

Kevin Barnett: No, that refers to race and ethnicity as well.

Tom Temin: Okay, so they want four years worth of these from the Office of Federal Contract Compliance Programs. And the OFCCP has put in a Federal Register Notice notifying contractors of this. Is that a usual procedure?

Kevin Barnett: I wouldn’t call it usual. But when federal agencies are faced with FOIA requests for contractor information, they’re required to provide notice to that contractor. Typically, they can just send a letter to that one contractor. When it involves 15, 20, 100, in this case, 15,000 contractors, sending out letters just isn’t practical. So they use the Federal Register notice. This is the first time I’ve seen OFCCP use this method, but I’ve seen other agencies use it, you know, sporadically over the years.

Tom Temin: Right. So what is OFCCP asking of the contractors through this Federal Register notice?

Kevin Barnett: So FOIA you know, it’s an amazing statute that allows anyone in the public to ask for any record held by a government agency. And the agency has to turn that record over unless the information falls within one of nine statutory exemptions. One of those exemptions, exemption four, allows the government to withhold information that is confidential, commercial or financial information. So the Federal Register requests provides notice to the general public that your information may be released, and it may contain confidential commercial information. If you want the agency to withhold it, you need to respond and explain to the agency why that information is treated confidentially. Why it qualifies as commercial, and the other different elements that the agency is going to need to prove to entitle it to withhold it.

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Tom Temin: In your view, is this particular information commercial?

Kevin Barnett: I think it’s definitely commercial. Although in most FOIA requests that address exemption four, whether the information is commercial or not, is really easy to establish. Pricing information, contract information, obviously, that’s commercial. Here, a little bit more difficult, because you have this demographic information about your workforce. The same FOIA requester submitted a similar FOIA request a few years ago, and litigated it. And the Northern District of California actually said this information was not commercial. So that is going to be a more difficult showing here in light of that decision. Although frankly, I think the Northern District of California got the issue of commercial and competitive harm, a little conflated. And I don’t think the agency made as many robust arguments as possible, possibly taking for granted that this information was going to be seen as commercial.

Tom Temin: We’re speaking with Kevin Barnett, he’s an attorney with a law firm, PilieroMazza. In PilieroMazza’s, view and your view, then, should contractors object to this FOIA request? And let me ask you a further question; is the sense that proprietary information will be released that could be used by competitors? Or is the fear that somehow this reporting group will take this data and with a preconceived notion prove that all contractors are biased organizations?

Kevin Barnett: Well, I think that most companies should file an objection to the disclosure of this information, provided that the company actually treats this information as confidential. There are some companies that proactively tout their diversity statistics and will publish this Information, or will publish very similar information in press releases. And you know, that’s great. At the same time, not every company does that. And those that do keep it confidential, often do so for very important reasons. A lot of my clients are small or smaller businesses, and the type of information you can glean from these reports, particularly year over year, actually have a lot of competitive value. If you know a company has, you know, 120 employees in 2016, and 2017. And then you can also find on publicly available sources, that they landed a big service contract in 2018, and now they’re up to 214 employees. Well, now instantly, you know, that that service contract has, you know, I forget my numbers now, but you know, about 85 FTEs assigned to it. And that’s a valuable competitive advantage when that contract comes up for re-compete.

Tom Temin: And at this point, though, contractors have no recourse to protect their information. If that FOIA request is granted, they can’t withdraw the reports or take some other measure to hide the information.

Kevin Barnett: So they can’t withdraw the reports. It’s required by contract and by statute to submit those reports, so they can’t stop submitting them. However, at the same time, if the Department of Labor were to reject the objections in say that they’re going to publish the reports, contractors would have the option of going to file their own lawsuit to prevent the disclosure under the Administrative Procedures Act.

Tom Temin: Right. And let me ask you this, if someone files an EEO-1 that the consolidated report, and is it ever possible for OFCCP, in its wisdom, to determine that there is bias at a contractor? I mean, what do they do with reports ordinarily, besides just file them and compile them, and then maybe shield them from FOIA?

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Kevin Barnett: And well, they’re part of a much larger filing and OFCCP will use that to identify whether the contractor is meeting its minimal requirements under its affirmative action regulations. I think how aggressive OFCCP is in using that information varies from administration to administration. And, I’m sure a lot of commenters will have opinions on whether they use it aggressively or too aggressively.

Tom Temin: But on the other hand, you could say then, that if the information has been filed with the federal government, and the government hasn’t done anything to a particular company, then who else is to judge whether that company is compliant or not, if in the government’s wisdom, imperfect, as it might be in getting to all these 15,000 reports, that nothing happened? So who’s an external party to say, well, you should have gone after this company?

Kevin Barnett: Yeah, I’m not sure that, you know, we need a private attorney general to be prosecuting every federal government regulation, in particular, where the flip side of having a private attorney general duplicate the work of the agency could have competitive harm to the company, where of course, if we just have OFCCP, police it, you wouldn’t have that same competitive harm aspect. I don’t think that really makes sense.

Tom Temin: All right. And so what is the deadline to file with the Federal Register those objections?

Kevin Barnett: Contractors must file by September 19 in response to the Federal Register Notice. OFCCP has set up a portal so you can file your objections there. They also have an email address to file your objections in that manner. We’ll see;  I think fingers crossed that the portal doesn’t crash as it gets closer to the deadline.

Tom Temin: All right. Kevin Barnett is an attorney with the law firm PilieroMazzo.

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